Valley Nat'l Bank v. 58 Vlimp, LLC

• Decision Date: 29 April 2013
• Docket Number: No. 25522/2012.,25522/2012.
• Parties: VALLEY NATIONAL BANK, as Successor by Merger to State Bank of Long Island, Plaintiff, v. 58 VLIMP, LLC, a/k/a SJPMAP, LLC, Stephen J. Phillips, New York State Dept. of Taxation & Finance, United States of America and John doe # 1 to john Doe # 10, the names being fictitious and unknown to the plaintiff the persons and parties intended being tenants, occupants persons, corporations, if any, having or claiming interests or lien upon the premises, Defendants.
• Court: New York Supreme Court

39 Misc.3d 1221

972 N.Y.S.2d 147

2013 N.Y. Slip Op. 50688

VALLEY NATIONAL BANK, as Successor by Merger to State Bank of Long Island, Plaintiff,

v.58 VLIMP, LLC, a/k/a SJPMAP, LLC, Stephen J. Phillips, New York State Dept. of Taxation & Finance, United States of America and John doe # 1 to john Doe # 10, the names being fictitious and unknown to the plaintiff the persons and parties intended being tenants, occupants persons, corporations, if any, having or claiming interests or lien upon the premises, Defendants.

No. 25522/2012.

Supreme Court, Suffolk County, New York.

April 29, 2013.

Foechelli, Curto, et. al, Uniondale, NY, for Plaintiff.

Darrell J, Conway, P.C., 58 Vlimp & Phillips, Babylon, NY, for Defendants.

THOMAS F. WHELAN, J.

ORDERED that this motion (# 001) by the plaintiff for accelerated judgments against the defendants, identification and deletion of party defendants, and the appointment of a referee to compute is considered under CPLR 3212, 3215 and RPAPL 1321 and is granted.

The plaintiff commenced this action to foreclose a consolidated commercial mortgage given by defendant 58 VLIMP, LLC [hereinafter VLIMP] on December 29, 2005 to secure certain mortgage notes that were consolidated under the terms of a Consolidation and Extension Agreement executed on that same date. Under the terms of the loan documents, monies totaling some $4,600,000.00 were made available to defendant VLIMP by the State Bank of Long Island, a predecessor-in-interest by merger to the plaintiff. As additional security for the loan, defendant Stephen J. Phillips, individually and by his property management guardian, David J. Depinto, Esq., executed, an unconditional guarantee of payment and performance of the obligations of VLIMP on December 29, 2005.

Various other loan documents were also executed on December 29, 2005 by the parties and several thereafter, by which, the maturity date of the loan was extended for additional consideration. In each of these five extension agreements, both VLIMP and Stephen Phillips, as guarantor, waived all claims, defenses and/or set-offs they might otherwise have against the mortgagee or its successors. The defendants first defaulted in their payment obligations on January 1, 2012, and again on January 13, 2012 which was the last extended maturity date of the loan. The plaintiff claims that none of the defaults have been cured by either of the obligor defendants.

In August of 2012, the within action was commenced by the filing of the summons and complaint. Therein, the plaintiff seeks the remedy of foreclosure and sale and a deficiency judgment against the mortgagor and guarantor defendants. The plaintiff further seeks foreclosure of its security interest in certain assets of personalty under the terms of the consolidated mortgage dated December 29, 2005. Issue was joined by service of a joint answer by the corporate mortgagor and its guarantor co-defendant dated September 27, 2012. That answer contains but one affirmative defense, namely, failure to state a claim upon which relief may be granted. An amended answer dated October 31, 2012 was served by the obligor defendants, which added a counterclaim for breach of a purported obligation on the part of the plaintiff's predecessor-in-interest to diligently process a new loan application submitted by the mortgagor in April of 2011 and to fund same in accordance with the terms of an acceptance letter of April 26, 2012. Such breach is alleged to have caused the answering defendants' defaults in payment under the loan documents sued upon in this action, all of which, allegedly provide the defendants with a cognizable counterclaim for money damages and a viable defense to the plaintiff's demands for relief. All other defendants joined herein by service of the summons and complaint failed to serve answers in response to such service.

By the instant motion, the plaintiff seeks summary judgment dismissing the affirmative defense and counterclaim asserted in the amended answer of the obligor defendants and for summary judgment on the FIRST, THIRD and FOURTH causes of action set forth in the plaintiff's complaint. Therein, the plaintiff seeks the remedies of foreclosure and sale, recovery of counsel fees and a deficiency judgment from the obligor defendants. The plaintiff also moves for an order identifying the name of the entity who was served as an unknown defendant pursuant to CPLR 1024, the deletion of the remaining unknowns and an amendment of the caption to reflect same. The plaintiff further seeks a default judgment against all defendants who failed to answer including the newly identified defendant, Corporate Realty Consultants, a/k/a, IOPTOMIZE Realty. Finally, the plaintiff asks the court to appoint a referee to compute amounts due under the terms of the note and mortgage.

The answering defendants oppose the motion by the assertion of new defenses not raised in their answer. They now claim that the plaintiff: 1) lacks standing to prosecute the claims interposed herein; and 2) fraudulently induced or intentionally caused the defendants to default under the terms of the loan documents. The opposing papers also include claims that the plaintiff's motion is premature due to the absence of discovery proceedings and that the plaintiff's misrepresentations, fraud and breaches of oral assurances and written commitments on the part of the plaintiff regarding its extension of future credit under the terms of the April 2011 new loan application coupled with the defendants' compliance with all obligations imposed upon it are sufficient to preclude the plaintiff from obtaining the remedies afforded to it by reason of the defendants' defaults in payment. For the reasons stated below, these claims are rejected and the plaintiff's motion is granted.

Entitlement to a judgment of foreclosure may be established, as a matter of law, where the plaintiff produces both the mortgage and unpaid note, together with evidence of the mortgagor's default, thereby shifting the burden to the mortgagor to demonstrate, through both competent and admissible evidence, any defense which could raise a question of fact ( see Emigrant Mtge. Co., Inc. v. Beckerman, 105 AD3d 895, 2013 WL 1632059 [2d Dept 2013]; Solomon v. Burden, 104 AD3d 839, 961 N.Y.S.2d 535 [2d Dept 2013]; US Bank Natl. Ass'n v. Denaro, 98 AD3d 964, 950 N.Y.S.2d 581 [2d Dept 2012]; Baron Assoc., LLC v. Garcia Group Enter., 96 AD3d 793, 946 N.Y.S.2d 611 [2d Dept 2012]; Citibank, N.A. v. Van Brunt Prop., LLC, 95 AD3d 1158, 945 N.Y.S.2d 330 [2d Dept 2012]; HSBC Bank v. Shwartz, 88 AD3d 961, 931 N.Y.S.2d 528 [2d Dept 2011]; US Bank N.A. v. Eaddy, 79 AD3d 1022, 1022, 914 N.Y.S.2d 901 [2010];Zanfini v. Chandler, 79 AD3d 1031, 912 N.Y.S.2d 911 [2d Dept 2010] ). To establish prima facie entitlement to judgment as a matter of law on the issue of liability with respect to a guaranty, a plaintiff must submit proof of the underlying note, a guaranty and the failure of the defendant to make payment in accordance with the terms of those instruments ( see Emigrant Mtge. Co., Inc. v. Beckerman, 105 AD3d 895, 2013 WL 1632059,supra; Solomon v. Burden, 104 AD3d 839, 961 N.Y.S.2d 535 [2d Dept 2013], supra; US Bank Natl. Ass'n v. Denaro, 98 AD3d 964,supra; Baron Assoc., LLC v. Garcia Group Enter., 96 AD3d 793,supra ).

Here, the moving papers established the plaintiff's entitlement to summary judgment on its first cause of action to the extent it asserts claims against the answering defendants as such papers included copies of the consolidated note and mortgage and other loan documents, including the Consolidation, Modification and Extension Agreement and the written guaranty of defendant Phillips executed on December 26, 2005, together with due evidence of a default under the terms thereof ( seeCPLR 3212; RPAPL § 1321; Emigrant Mtge. Co., Inc. v. Beckerman, 105 AD3d 895, 2013 WL 1632059,supra; Solomon v. Burden, 104 AD3d 839,supra; US Bank Natl. Ass'n v. Denaro, 98 AD3d 964,supra ). The moving papers further included due proof that the affirmative defense and counterclaim asserted in the amended answer of the obligor defendants are without merit as such defendants waived all such defenses and claims in one or more of the loan documents executed by them at the time of origination or thereafter. The plaintiff thus established a prima facie entitlement to summary judgment dismissing the affirmative defense and counterclaim and to summary judgment on its claims for foreclosure and sale of the mortgaged premises and the recovery of attorneys fees and a deficiency judgment against the obligor defendants.

It was thus incumbent upon the answering defendants to submit proof sufficient to raise a genuine question of fact rebutting the plaintiff's prima facie showing or in support of some affirmative defense asserted in their answer or otherwise available to them ( see Flagstar Bank v. Bellafiore, 94 AD3d 1044, 943 N.Y.S.2d 551 [2d Dept 2012]; Grogg Assocs. v. South Rd. Assocs., 74 AD3d 1021, 907 N.Y.S.2d 22 [2d Dept 2010]; Wells Fargo Bank v. Karla, 71 AD3d 1006, 896 N.Y.S.2d 681 [2d Dept 2010]; Washington Mut. Bank v. O'Connor, 63 AD3d 832, 880 N.Y.S.2d 696 [2d Dept 2009] ). Notably, self-serving and conclusory allegations do not raise issues of fact and do not require the plaintiff to respond to alleged affirmative defenses which are based on such allegations ( see Charter One Bank, FSB v. Leone, 45 AD3d 958, 845 N.Y.S.2d 513 [3d Dept 2007]; Rosen Auto Leasing, Inc. v. Jacobs, 9 AD3d 798, 780 N.Y.S.2d 438 [3d Dept 2004] ). Where a defendant fails to oppose some or all matters advanced on a motion for summary judgment, the facts as alleged in the movants' papers may be deemed admitted as there is, in effect, a concession that no question of fact exists ( see Kuehne & Nagel, Inc. v. Baiden, 36 N.Y.2d 539, 369 N.Y.S.2d 667 [1975];see also Madeline D'Anthony Enter., Inc. v. Sokolowsky, 101 AD3d 606, 957 N.Y.S.2d 88 [1st Dept 2...